Click here to find out what John Fleming, executive vice president, Global Manufacturing and Labor Affairs, said about the strides the Manufacturing team continues to make in growing the company and supporting the One Ford plan.
DEARBORN -- When gas prices approached a jaw-dropping U.S. $4 per gallon in 2008, the entire auto industry was challenged by a quick and massive shift in consumer demand away from large trucks and SUVs to smaller, more fuel-efficient cars and crossovers.
Cars outsold trucks that year for the first time since 2000. At the same time, Ford Motor Company’s North American manufacturing facilities were undergoing a major transformation as part of the company’s One Ford plan. The traditional factories of yesteryear that mass produced just one product were methodically being replaced by more nimble, flexible, technologically advanced operations capable of producing multiple vehicle models on a single assembly line – operations that could swiftly respond to unpredictable changes in customer preferences.
“In the past, the way we responded to shifts in consumer demand was to raise or lower production in one plant, and that’s very problematic because people would either be on extensive overtime or we would have to lay off a shift,” explained Jim Tetreault, vice president, North American Manufacturing.
“Today, the majority of our body shops have flexible capability to build several vehicles in one plant. Thisgives us the ability to vary our model mix and more rapidly respond to the market.”
The changeover to flexible manufacturing plants is important, says John Fleming, executive vice president, Global Manufacturing and Labor Affairs, because at the end of the day Ford’s ability to respond swiftly tocustomers and provide them with products that they want and value – with top quality, safety and best-in-class features – will be what sets the company apart from the competition.
“We have to give customers the best products. We have to give them the best brand, the best technology, the best quality and give it all at a price that the customer considers to be great value,” he said. “If we do that, then we’ve got a fantastic future.”
The Road to Flexible Manufacturing
Though flexible manufacturing provides a multitude of benefits, the journey to transform Ford’s North American manufacturing system has not been without tremendous challenges. Over the past few years, there have been significant employee reductions in all areas of the company, and many plants and facilities were closed or sold.
“We’re still in the process of right-sizing demand. What’s changed is that the plants we have will produce much higher volume and multiple products,” said Tetreault. “We’ve also been making steady, sizeable investments in our plants to create a manufacturing system that is both lean and flexible and capable of delivering best-in-world manufacturing quality.”
In addition to enabling Ford to better adjust capacity to match real demand, another important advantage to flexible manufacturing is the ability to introduce products without having to shut plants down to retool. And with flexible manufacturing comes the ability to run higher-volume facilities.
“Ideally, we’d have plants that can run 24/7 all 365 days of the year because that would be 100 percent capacity utilization. What we’re really going to do is operate three shifts, five days a week and use Saturdays as an opportunity for upside volume. But that’s quite different than how we used to operate,” said Tetreault. “Instead of two shifts and 250,000 units a year, we’ll be looking at three shifts running around the clock and 350,000 to 450,000 units a year.”
According to Tetreault, 100 percent of Ford’s North American assembly plants will have some degree of flexibility by 2012, and nearly half of the company’s transmission and engine plants around the world will be flexible – capable of building several architectures on the same line.
Ford’s Chicago Assembly Plant has gone through significant transformation over the years. Most recently, the next-generation Ford Explorer is being built there on a flexible assembly line alongside the new Ford Taurus and Lincoln MKS sedans. Ford invested nearly $400 million in the Chicago Assembly and Stamping Plants to launch production of the new Explorer, which included $180 million in manufacturing investments.
In 2005, the Oakville Assembly Complex in Ontario began a $1 billion conversion to flexible manufacturing, including a state-of-the-art body assembly facility.
The Oakville plant can build multiple models on unique architectures enabling the plant to change the mix, volume and options of products more quickly in response to consumer demand. Currently, Oakville builds the Lincoln MKX, Ford Edge, Lincoln MKT and Ford Flex on the same assembly line.
Ford invested $3 billion in 2008 to develop three projects in Mexico, which included retooling of the Cuautitlán Stamping and Assembly Plant from production of F-Series trucks to small car production. The Cuautitlán plant – also a model of flexibility – currently produces the Fiesta for the North American market.
And last year, Ford invested $550 million to transform Michigan Assembly Plant – which formerly built the Ford Expedition and Lincoln Navigator – into a lean, green and flexible manufacturing complex that will build the nextgeneration Focus along with a new battery-electric version of the Focus for the North American market.
When production of the all-new Ford Focus begins early next year, Michigan Assembly Plant will be the company’s new benchmark for flexible manufacturing around the world.
“At Michigan Assembly, we will achieve a level of flexibility we don’t have in any other plant around the world, which will allow us to meet shifting consumer preferences in real time,” said Tetreault.
After production of the new Explorer shifts to Chicago, Louisville Assembly Plant will take flexibility to the next level, producing a new generation of yet-to-be-announced cars off of Ford’s global C-car platform.
Building global platforms
For the first time in history, Ford is developing and manufacturing vehicles on global platforms. The first global vehicle – the subcompact Fiesta – is already in the marketplace, and the next generation compact Ford Focus will launch early next year.
In the past, explains Tetreault, a Focus built in the U.S. would bear little resemblance to its European counterpart with regard to components, engineering and the overhead that the company used to develop the car. Today, vehicles are being designed, engineered and built one time globally – rather than completely different versions of the same vehicles for different regions sequentially – to serve the same consumer taste.
“Ultimately, we will build more than 2 million vehicles off the global Focus platform,” he said. “The economies of scale that come with that platform are significant.”
According to Tetreault, the other major benefit of moving to global platforms is that manufacturing can process the vehicle similarly regardless of where it’s built.
“We have one bill of process, which is a description of how we want the car to go together and
the tools we use to put it together,” he said. “That also gives us economies of scale because instead of buying unique tools for every plant, we can place an order for several plants at one time and use very common tools to assemble automobiles.”
Fleming says that the similarities in plant layouts and tooling are striking.
“You can go to Michigan Assembly Plant or to Cuautitlán and you will see the same methods of putting flexibility in and the same tools out on the floor even though the plants are in different countries,” he said. “That is the global process working at its best.”
For those who think that platform engineering results in “cookie cutter” cars, Tetreault says think again.
“If you look at the Ford Taurus, Explorer, Flex and the Lincoln MKS and MKT, those are five quite different vehicles that bear very little in common in terms of what the consumer perceives and experiences,” he said. “It would be hard to say that those are ‘cookie cutter’ vehicles.”
Working Together to Create One Ford
As Ford continues to build great products with exceptional quality, to grow its market share and to improve its brand reputation, one thing remains constant: The company’s commitment to its One Ford plan.
“We’ve gotten to where we are because we’ve done an exceptional job of working together – between management and union, between manufacturing, product development and purchasing and our supply base,” he said. “We’ve done a very good job of working together and resolving problems in a way that’s a win-win for all the constituents involved.”
Fleming agrees that staying true to the One Ford plan is important to the future of Ford. “Working together is absolutely critical to making it work,” he said.